How to influence the perception of value?

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Value is a critical concept in economics. Peter Drucker famously said: “The purpose of a business to create a customer”. And the only way to create a customer, is to make him appreciate the value of what the company is offering for a reasonable price. But what is value really? And are we good at calculating the value or something?

We are price clueless

Well, it turns out we’re terrible at understanding value. In the book Priceless, William Poundstone explains the concept of “Price Cluelessness”. Because we have no idea of what something should cost, our System 1 – or automatic brain – is always relying on shortcuts to figure out the value of something. If we see a nice pair of sunglasses in a Chanel store, we expect them to cost € 200. But in an H&M store, these € 200 sunglasses would never sell. Even worse: people would be outraged. The context determines how to decode the value.

We even take price as a clue

Our incompetence for understanding value gets even worse: We tend to look for the price itself to find a clue whether something must be valuable. Something is priced high; therefore it must be excellent, otherwise, they would never price it this high. Also, when we really want the high-priced item, we tend to look for explanations, to trick ourselves into believing it’s actually a bargain. Stella Artois once campaigned around this idea. You could buy a coupon to pay even more for your Stella, thereby underscoring its brand promise “reassuringly expensive”. What most people in Britain don’t know is that in Belgium, Stella Artois’ home country, Stella is just an ordinary beer.

Popularity as a shortcut for value

The fact that something is popular is also a classic “System 1”-shortcut for determining the value of something: Many people want this item, therefore it must be good. Popularity helps you to decide without having to think about that decision. This is probably one of the most critical roles of branding: You know you can’t miss with buying a Jack Daniels, because you know everybody knows Jack Daniels.

Psychological value

The examples above are classic behavioural psychology tricks on how to influence the perception of value. But that’s the easy part. It gets much more interesting when you approach value from a human-centred point of view. Human-centred designers take irrational humans as their point of departure, for which they design answers and solutions. And when you depart from humans, you ask yourself questions like ‘How might we help people to…’:

• Achieve their goals and realize their dreams?
• Build positive long-term habits?
• Resist their impulses and temptation?
• Look at reality in new ways to trigger positive action?
• Feel appreciated and respected?
• Take away pain or frustration in their current experience?

Behavioural Design is fascinated with humans, their dreams, their fears, their bad habits, frustrations and their desire for happiness. And if we can understand them and design solutions form them, we will create psychological value.

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